TaxTMI 
TaxTMI 
2019 (11) TMI 916
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....al income of Rs. 29,22,560/-. During the assessment proceedings, the AO observed that certain members have introduced huge amount of capital for the business aggregating to Rs. 76,45,000/- and after calling for the assessee's explanation and seeking information from the members by invoking section 133(6) of the Act, he made addition of Rs. 76,45,000/- by treating the same as unexplained capital introduction earned from undisclosed sources of income. 3. Being aggrieved, the assessee carried the matter in appeal before he ld CIT(A) and filed various evidences like bank statements, confirmations, ITRs of the members in support of its claim and requested to entertain the same as additional evidence under Rule 46A of IT Rules, 1962. After considering the remand report from the AO, deleted the addition to the extent of Rs. 44,45,000/- but confirmed the addition of Rs. 32 lacs by holding that source and genuineness of transaction remains unexplained. Against the said findings, the assessee is now in appeal before us. 4. During the course of hearing, the ld AR submitted that the assessee AOP was originally constituted w.e.f. 19.03.2010 with thirty eight members. It was reconstituted on....
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....le at home. Further the said creditor claimed to have given the amount out of agricultural income but no income from agricultural operation has been declared in the ITR. His confirmation is enclosed. In remand proceedings he was produced for verification and his statement was recorded in which he accepted to have given amount of Rs. 15 lacs in cash. The source of same was explained to be out of old savings, contract receipts, income from property dealing and family agricultural income. In the statement he explained the fact of having agricultural land of 145 bigha in his name as well in the name of family members in support of which land documents were also filed. He is regularly assessed to tax. During the year he filed the return declaring an income of Rs. 5,96,770/-. He is having capital of Rs. 1,08,19,601/- as on 31- 03-201 which proves his creditworthiness. He has shown the investment in assessee AOP in his Balance Sheet. Hence, the capital contribution of Rs. 15,00,000/- received from him is fully explained. The assessee has not shown the agricultural income in his return as it is the income of HUF. There is no law that if an assessee has a bank account he can't keep cash i....
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.... month, live in his own house, has simple life style and house hold expenses are about Rs. 5,000/- p.m. In support of the same he has filed an affidavit. His confirmation is at. Thus, the source of capital contribution is fully explained. The opening balance is Rs. 3 lacs and no addition has been made in the assessment of earlier years. Hence, no addition can be made in the year under consideration. Rs. 32,00,000/- 5. It was submitted by the ld AR that from the above table, it can be noted that the assessee has discharged its onus by furnishing adequate evidence, return of income and the affidavits of the members confirming the contributions made by them. Only in case of Yoginder Singh Chouhan, the assessee could not produce confirmation due to differences and disputes but the fact that he has overdrawn his capital a/c by Rs. 90,69,542/- in itself is a testimony of the fact that he introduced capital of Rs. 13 lacs in the year under consideration. Further, reliance was placed on the following cases:- * Aravali Trading Co. Vs. ITO 187 Taxman 338 (Raj.) * CIT Vs. H.S. Builders (P.) Ltd. 78 DTR 169 (Raj.) * Kanhaialal Jangid Vs. ACIT 217 CTR 354 (R....
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.... 38,45,000/- credited in the account of Yoginder singh Chouhan and debited the OBC bank account through voucher No. 375. Copy of mission, Ledger account statement of Yogindra Singh Chouhan, OBC ledger account & bank account statement, day book and certificate issued by OBC bank, Bikaner are enclosed for your kind perusal." On perusal of the AO's report, I find that the amount of Rs. 38,45,000/-was not capital contribution, this was the money credited to his account on cancellation of demand draft issued from appellant AOP on 25/02/211 and 26/02/2011 in favour of Mining Department for getting Royalty contracts in his own name. Further it was stated that Sh. Yogender Singh Chohan is one of the member of appellant AOP and equally liable to tax proceedings. In such circumstances, the genuineness of cash transaction worth Rs. 13,00,000/-remained unexplained; however addition of Rs. 38,45,000/- stands explained. Thus, the addition of Rs. 13,00,000/- is herby upheld and the addition of Rs. 38,45,000/- is deleted hereby. 2. Sh. Bhanwar Singh Makori, Nagaur. Sh. Bhanwar Singh Makori contributed Rs. 15,00,000/- in cash in the assessee's capital. Regarding the above addition ....
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....wns and he being a prudent businessman would not keep the huge cash idle at home. Further the said creditor claimed to have given out of agriculture income but no income from agriculture operation has been declared in the ITR. In this regard, I am of view that the capital introduced in cash by Sh. Bhanwar Singh was nothing but his undisclosed income. Appellant failed to prove the creditworthiness with regard to cash. Thus, the source of cash and genuineness of cash transaction worth Rs. 15,00,000/-remains unexplained. Accordingly, this addition is hereby sustained." "5. Sh. Mota Ram Saini, Sikar. Sh. Mota Ram Saini contributed Rs. 2,00,000/- in cash in the assessee's capital. Regarding the above addition the AO submitted in his report dated 16.01.2019 as under:- "Assessee neither produced the person nor any confirmation from Sh. Mota Ram Saini despite providing sufficient time. No documentary evidence of explanation in this regard submitted." The appellant neither produced the person nor filed any confirmation of Sh. Mota Ram Saini before AO. The onus of proving the source of a sum of money found to have been credited in the books of account is on him. Whereas the s....
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....a tractor workshop at Jaipur road, Sikar and earned monthly income of Rs. 15,000/- and claimed to have given Rs. 1,00,000/- out of this income. However I find no strength in his contention, the same were not supported with documentary evidences of his being able to save such an amount. The appellant produced evidence in support of this contention neither before the AO nor before me. Thus, the source and genuineness of cash transaction worth Rs. 1,00,000/- remained unexplained by the appellant. Thus, this addition is hereby upheld. The appellant company furnished the affidavits with respect to capital introduce by Sh. lqbal and lqram Khan, the merely submissions of affidavit is not enough to discharge the onus cast upon the appellant. Identical issue has been covered by the Hon'ble ITAT, Chandigarh in the case of ACTT vs. Ashok Nayyar [2006] 10 SOT 92 (Chandigarh) wherein it was held as under:- "In the case of regular taxpayer and in the case of creditor who has filed the return for the first time ostensibly to explain the credit have got to be distinguished. Moreover, the surrounding circumstances and preponderance of probabilities are also to be taken into consideration ....
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....on that the genuineness of the cash transactions remained unexplained. It was submitted by the ld. AR that the capital of Rs. 13,00,000/- was introduced on 02.04.2010 however Sh. Yogindra Singh Chouhan was not cooperating with the assessee and the assessee has specifically requested the AO for verification of facts directly from him. However his attendance was not enforced, it was accordingly submitted that no addition should be made in assessee's hands. We find that the Assessing Officer has given adequate opportunity to the assessee during the course of assessment proceedings to furnish the documentation in support of the capital introduction by Sh. Yogindra Singh Chouhan. Further, notice u/s 133(6) was also issued which remained uncomplied with and even during the remand proceedings, there is nothing which has been filed or brought on record in support of the substantiating the source of capital contribution by Sh. Yogindra Singh Chouhan. It is no doubt true that there is movement in his personal account maintained with the assessee's AOP, however, the fact of the matter is that the explanation regarding the source of the capital introduction by way of cash and the creditworthin....